To: Julián Castro, Department of Housing and Urban Development Secretary
Tell HUD Secretary Julián Castro: Stop selling our neighborhoods to Wall Street!
We are disappointed to see that under your leadership, 98% of the mortgages sold in 2015 through the Department of Housing and Urban Development’s (HUD) Distressed Asset Stabilization Program went straight to reckless Wall Street banks, the same banks responsible for the housing crisis, even after HUD pledged to prioritize community-based organizations.
We urge you to follow through on your agency’s mission, “To create strong, sustainable, inclusive communities and quality affordable homes for all.” And we call on you to immediately cease sales through the Distressed Asset Stabilization Program until the program is fundamentally reformed so that loans are not just sold at deep discounts to reckless Wall Street banks. Stop selling our neighborhoods to Wall Street!
Why is this important?
Wall Street bankers are back at it again, buying up people’s mortgages at discount prices from government agencies like the Department of Housing and Urban Development (HUD). And Secretary Julián Castro's Wall Street giveaway lets the bankers who helped create the foreclosure crisis profit off of struggling homeowners’ mortgages. For years, the banking industry has made billions by displacing communities, destroying neighborhoods and looting the public’s assets. Mr. Castro should be helping people stay in their homes, not helping Wall Street bankers profit from economic inequality and exploding debt.
HUD is supposed to help homeowners stay in their home through its “Distressed Asset Stabilization Program.” But instead it has been a giveaway for Wall Street: In 2015, 98% of homes sold through HUD’s DASP program went straight to Wall Street (15,309 out of 15,624). These homes are often sold at steep discounts, averaging 45% off for some of the biggest banks on Wall Street. A majority of the loans went to The Blackstone Group, a huge private-equity company notorious for its foreclosures. Blackstone tenants have dealt with roach infestations, harassment, and even attempts at illegal evictions.
In 2008, as the financial markets came crashing down under the weight of the predatory, racially targeted subprime mortgage crisis, millions of Americans saw the wealth that they had spent generations building wiped out by Wall St. recklessness.
The year before, in 2007, African Americans held 71% of their wealth in home equity, while Latinos held almost 90% of their wealth through homeownership. When the housing market collapsed, it took this wealth with it: African Americans lost a third of their wealth between 2007 and 2011, and Latinos lost more than two-thirds.